## Facts

- The Society of Lloyd’s (Society) held a collectible judgment from the 1990s against Lea Ward.
- In the 2000s, Society learned Ward had transferred assets into two trusts that benefited Alfred and Betty Moore and other beneficiaries.
- Society sued Ward and the beneficiaries in federal court, asserting claims including fraud and fraudulent transfer.
- In 2006, the court granted summary judgment for the beneficiaries on the fraud claim but denied summary judgment on the fraudulent-transfer claim, leaving that claim for resolution.
- The parties agreed to a hybrid ADR procedure combining arbitration and mediation to resolve the remaining fraudulent-transfer dispute.
- The parties selected one neutral, Lawrence Glassmann, to serve in both roles: arbitrator first and then mediator.
- Under the agreed structure, Glassmann conducted the arbitration and issued a decision that remained confidential while the mediation proceeded.
- During the mediation, on February 20, 2006, Glassmann emailed Society with his evaluation of strengths and weaknesses in Society’s case, discussed laches and a separate dispute between the parties, and urged settlement.
- The mediation did not resolve the case, and the arbitration decision was then disclosed; Glassmann ruled for the beneficiaries and assessed arbitration costs against Society.
- Society moved to vacate the award, arguing the February 20 email showed Glassmann relied on matters outside the arbitration record.
- The beneficiaries moved to strike the email, arguing it was a confidential mediation communication and could not be used in the vacatur proceeding.
- Society opposed the motion to strike, arguing the email was not privileged and that mediation privilege should not apply in a combined arbitration–mediation arrangement.

## Issues

1. Whether the neutral’s February 20, 2006 email, sent during the mediation phase of the agreed hybrid procedure, was a confidential mediation communication that should be excluded from the court record and from consideration.
2. Whether Society established grounds under the Federal Arbitration Act to vacate the arbitration award based on alleged reliance on extra-record matters, misconduct, or partiality.

## Decision

- The court treated the February 20 email as a confidential mediation communication and granted the beneficiaries’ request to strike or exclude it from the record and from consideration in the post-award motion practice.
- The court denied Society’s motion to vacate the arbitration award.
- The arbitration award in favor of the beneficiaries, including the cost assessment, remained in effect.

## Legal Principles

- Courts may exclude communications made during mediation from later judicial proceedings when confidentiality is part of the parties’ mediation arrangement and is consistent with the function of mediation.
- In a hybrid procedure where one neutral serves as arbitrator and mediator, communications made during the mediation phase may remain confidential even though the same neutral issued the arbitration decision.
- Vacatur under the Federal Arbitration Act is limited to narrow statutory grounds; dissatisfaction with the merits of the award, or speculation about what the arbitrator considered, is not enough.
- A party seeking vacatur must support its challenge with admissible evidence; a court may refuse to consider evidence that is barred by mediation confidentiality.
- Evaluative settlement communications by a mediator during mediation, including candid comments about a party’s litigation risks, do not by themselves establish “evident partiality” or other FAA misconduct sufficient to overturn an award.

## Conclusion

Society of Lloyd’s v. Moore held that a mediator-arbitrator’s evaluative email sent during the mediation portion of a med-arb process was confidential and could not be used to attack the arbitration award; without that email (and in any event under the FAA’s narrow vacatur standards), Society failed to justify vacatur, so the court left the award for the beneficiaries intact.


Society of Lloyd's v. Moore, 2006 U.S. Dist. LEXIS 80963 (2006)